The Regulatory Commission of Alaska will take a closer look at Alaska Electric Light & Power’s under-construction diesel power plant on Industrial Boulevard.
In an order published by the commission Wednesday, state regulators asked AEL&P for additional information about the need for the plant, and for studies analyzing what will happen to Juneau’s electric grid and the city as a whole when it is switched on.
The order has no effect on construction of the plant, which is still scheduled to begin operations in October, AEL&P vice president Debbie Driscoll said by phone.
The RCA’s request for more information was partially driven by a complaint from Danielle Redmond, a Juneau resident and passionate proponent of clean power. Redmond is coordinator of the Alaska Climate Action Network but filed the complaint as an ordinary resident, she said.
While AEL&P is promoting the new plant as a backup power source if hydroelectricity is unavailable, “it’s really hard to claim that when it’s 23 megawatts of power and especially hard to claim that when AEL&P says there isn’t a need for more electricity,” Redmond said by phone.
Redmond was referring to comments made by AEL&P to the Federal Energy Regulatory Commission about the Sweetheart Lake hydroelectric project, a 19-megawatt effort planned by Juneau Hydropower Inc., an organization unaffiliated with AEL&P.
In her complaint, she asked whether the company actually intends to use the plant as primary generation for the Greens Creek mine. AEL&P announced plans along those lines in February.
For its part, the company has maintained that it will use the new plant to supply Juneau’s needs in the event that Snettisham hydroelectric power is unavailable.
Driscoll said the new plant’s purpose is to meet the backup power needs of existing AEL&P customers. In the event of a hydropower-severing disaster on a cold day, the company does not have enough power to easily meet Juneau’s needs.
“This is a backup unit that would serve our existing customers if we’re cut off from our hydro sources,” Driscoll said.
She added that unfortunately, Juneau’s primary hydropower options are all south of the city, which makes hydropower backup options difficult to find.
In Wednesday’s filing, the RCA says “it is in the public interest for the (Attorney General) to participate in this proceeding as a party. The chairman therefore invites the AG to participate.”
Robert Pickett, chairman of the RCA’s board of commissioners said that invitation is common, but it’s not done on every case.
The RCA does not make go/no-go decisions on power projects in Alaska. Rather, it regulates the rates that utilities are permitted to charge customers.
In this case, AEL&P had asked RCA for permission to set a “depreciation rate” on the new power plant. “AELP requests that the proposed depreciation rate be approved for accounting purposes only. AELP is not seeking any change in electric rates at this time,” the company said in a July 20 filing.
The new power plant is sure to eventually result in higher electric rates, however.
“All of our infrastructure investments impact our rates down the road,” AEL&P President Tim McLeod told the Juneau Chamber of Commerce earlier this month. “There will be some inflation.”
The amount of that “inflation” will be determined by a future rate request from AEL&P to the RCA. The amount of that future rate request will be partially determined by the matter now under consideration.
Driscoll said the information requested by the RCA is unusual at this point in time, but because AEL&P was planning to request a rate increase later this year, it is happy to provide the information now.
AEL&P and the general public are allowed to comment on the matter before Aug. 18. Email rod.crum@alaska.gov and reference Docket U-16-067 in the headline of the email.
The RCA has scheduled a preliminary hearing on Aug. 19 to consider a timeline of decision. It expects to decide the matter by Jan. 16.
• Contact reporter James Brooks at 523-2258 or james.k.brooks@juneauempire.com.
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